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REGISTRIES

Open registries

FAST FACTS

Maintaining a quality fleet is particularly challenging these days when many owners are watching every penny to maintain profitability. The Registry has been working more closely with owners and operators to ensure that quality remains a focus

PHOTOGRAPHY: US COAST GUARD DIGITAL

THE PORT OF LOS ANGELES

of Australian resident seafarers to carry cargoes between Australian ports.” However, while this interest in international flags is great for traditional shipping nations, there is still a mountain to climb in terms of winning back typical open registry tonnage. While 84% of the world’s registered tonnage is in the hands of the top 20 ship registries (a list that includes a mix of register type), the top three registers – Panama, Liberia and the Marshall Islands – control 40% of the world’s registered tonnage. All are open registries. And while historically open registries were a Prohibition-era ruse to avoid US anti-alcohol laws, among other legislation, things have changed. “Many companies don’t differentiate between the way they run their national flag and [open registry] ships. Tax and other financial regulations are usually the reasons for using [open registries]; crewing restrictions are less of an issue,” says one London-based expert. REGISTRIES AND BEST PRACTICE Dr Dale Neef, management consultant and founder of DNA Maritime, accepts the permanence of open registries and suggests where they can raise the bar in best practice. Dr Neef says: “I suspect that [open registries] are here to stay and that our best hope is that some of the registries, pressured by operators, begin to differentiate themselves by establishing higher levels of corporate social responsibility

behaviour – creating a tiering of [open] registries that ranges from ‘may be bad’ to ‘are demonstrably bad’. Any movement in that direction is to be welcomed.” Nothing in business is ever static, and change is coming for registers and shipping lines in the form of the Maritime Labour Convention 2006. Next year’s implementation of the convention will set seafarers’ rights to decent conditions of work and will help to create conditions of fair competition for shipowners. The convention enters force on 20 August 2013, and Bill Gallagher, president of International Registries for the Marshall Islands, believes responsible registers will implement it. He adds that the convention matches the ambitions of the Republic of the Marshall Islands (RMI) to be responsible for owners and labour, and that the RMI register has put a premium on quality since its inception – and is now the third largest in the world. He says: “Maintaining a quality fleet is particularly challenging these days when many owners are watching every penny to maintain profitability. Communication is a critical factor in working with cash-strapped vessel owners and operators. The Registry has been working more closely with owners and operators during this global financial downturn to ensure that quality remains a focus.” While the industry continues to pit closed, international and open registries against each other, UKSR has a closing comment that may temper the debate. It regularly meets with competitors in a drive for continual improvement in safety standards. “We are all part of the same industry and are all working for the common cause of safety at sea,” says Mazumdar. “We remain open to discussions with other registers, whether they are competitors or not, for the greater good of the maritime industry.” JAMES GRAHAM

After a career on daily newspapers, James started in business-to-business transport journalism in 1995, and specialises in ocean and rail-cargo transport. Outside journalism, James works for a leading transport PR agency, producing material for two of the world’s most innovative freight forwarders.

According to the United Nations’ (UN) Review of Maritime Transport 2011, the 35 largest flags of registration accounted for 93.8% of world shipping. Of those, the largest flag is Panama, with 306 million dwt (21.9% of the world fleet), followed by Liberia, with 166 million dwt (11.9%), and the Marshall Islands’ 99 million dwt (7.1%). Together, the top five registries accounted for 52.6% of the world’s tonnage, while the top ten registries accounted for 72.7%. The UN identifies that, by number of vessels, the largest fleets are flagged in Panama (7,986 vessels of 100gt), the US (6,371), Japan (6,150), Indonesia (5,763), China (4,080) and the Russian Federation (3,485). Except for Panama, these fleets include general cargo and other vessels that are employed in coastal, inter-island and inland waterway services. Panama caters mainly for owners from China, Greece, Japan and Korea, while Liberia is used mostly for German and Greek-owned ships. Marshall Islands Registry clients are principally from Germany, Greece and the US. The client base of the Bahamas is broad. The largest group of owners for the Maltese Registry is from Greece. Carriers from China, Japan and Korea rely mostly on the Panama flag, while German owners register their ships mainly in Liberia.